25 August 2008 17:14 [Source: ICIS news]
The National Association of Realtors (NAR) noted, however, that the pace of existing home sales in July was still 13.2% below the 5.76m-unit rate seen in July last year.
But NAR President Richard Gaylord also pointed out that the pace of 5m units recorded for July is the highest level seen in five months.
“The up-and-down pattern may break soon,” Gaylord said.
Gaylord said the July turnaround in the existing homes market comes just as a new federal stimulus package for the housing sector is poised to take effect.
“We hope that the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead,” Gaylord said.
In late July the US Congress passed and President George Bush signed a housing stimulus bill that gives first-time home buyers a $7,500 tax credit if they buy a new or existing residence before the end of the second quarter next year.
Those incentives will have to drive a lot of first-time buyers into the market if there is to be any significant erosion of the huge inventory of homes for sale, the association noted.
NAR chief economist Lawrence Yun pointed out that “inventory remains high in many parts of the country and will require time to fully absorb”.
At the end of July about 4.67m homes were for sale across the
In a normal housing market, the supply of existing homes for sale would be only 4-6 months’ worth.
Many analysts say housing sales are being kept down in part because potential home buyers are waiting, anticipating that prices may fall still further. That practice among would-be home buyers can be a self-fulfilling prophecy.
NAR said the median price for homes in July was $212,400 (€144,432), down more than 7% from July 2007.
“Buyers who’ve been on the sidelines should take a closer look at what’s available to them now in terms of financing and incentives,” Gaylord said, noting that home prices tend to rise just a few months after housing sales turn upward.
($1 = €.68)
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